Introduction
It seems reasonable to state that nowadays, companies are facing a considerable number of management challenges that are to be addressed and investigated, especially under the conditions of COVID-19. The variety of issues forces a firm to continuously improve and develop its managerial approaches to remain competitive these days. Below, a discussion on three crucial management problems, as well as the related examples, will be provided.
Reputation Management
In the economic conditions of today, business reputation is among essential factors that affect the long-term and sustainable performance of companies. The positive business reputation of the company determines the adoption of decisions by counterparties on cooperation with it (Calvelli and Cannavale, 2018). This also helps to attract highly qualified personnel, provides access to investment resources and high-quality professional services, acts as a kind of credit of trust for its consumers.
Thus, a positive business reputation, its “good name” becomes a source of additional benefits both for the company itself and for all parties interested in successful interaction with it. As an important component of intangible assets, it serves as a significant economic lever in the strategic development of the company. Moreover, in the context of financial instability and increased competition in the markets, a positive business reputation is a sustainable competitive advantage of a company that cannot be imitated by competitors (Collis, 2014).
In the era of globalization and the intensification of the struggle for resources, corporate social responsibility acts as the most important reputation characteristic, which involves taking into account and minimizing the negative impacts of a company not only on the economy but also on society and the environment (Verčič and Ćorić, 2018). Therefore, the formation and strengthening of the company’s business reputation should be considered depending on the perception of its activities by all interested groups of influence – stakeholders.
Reputation is an identified intangible asset that is difficult to measure in value terms but which provides additional income and other economic benefits. This asset also offers good conditions for the development of the company when looking for a partner or supplier, attracting customers, dialogue with regulators, shareholders, and other interaction groups (Mauri et al., 2018). Thus, business reputation becomes a prerequisite for a company to achieve sustainable and long-term development. Reputation management is becoming a strategically important direction in the competitive struggle.
It should also be noted that knowledge of the factors affecting business reputation determines the assessment of the financial stability of companies and allows us to predict the emergence of economic danger (bankruptcy, for instance). However, today there is no single established practice of assessing business reputation in general and intangible assets in particular. The difficulty in evaluating business reputation also arises when it comes to a non-public company whose shares are not traded on stock exchanges and, accordingly, it is extremely difficult to assess its market value (Gao et al., 2017).
Then, there are many examples of how positions in reputation ratings do not fully reflect the financial and economic performance of companies. Financially successful firms such as Exxon Mobil, Nestle, Intel, or Toyota do not necessarily have leading positions in reputation rankings.
It is obvious that the long-term development of the company is inextricably linked not so much with the price of existing property and other tangible assets but with purposeful activities to strengthen the reputation of its company. A good reputation makes a company more attractive, increasing revenue, providing opportunities to enter new markets, and attract more significant funding. Reputation is gradually replacing traditional advertising as the main trade engine (Mauri et al., 2018).
Material components are progressively being replaced in the value of the goods; in other words, the time has come to trade in images and impressions. Nowadays it is not enough to have perfect products and provide quality services. The position of the company in the market becomes decisive, and the highest rank for the company is that in which customers perceive its image and business reputation.
A negative business reputation shows the instability of the position of its owner in the economic turnover, as well as distrust of counterparties to it. A notable case in this regard is related to the company called United Airlines. There has been a viral video of how a passenger was forcibly removed from his seat due to an overbooked company’s flight (Stebbins et al., 2018).
According to Stebbins et al. (2018, para. 10), “United’s stock dropped 4% in the days following the incident, wiping as much as $1 billion off the company’s market value.” Such a state of affairs tends to affirm the above rationale. This company has faced a plethora of adverse outcomes due to its bad reputation, which resulted in worsen incomes. United Airlines made substantial efforts to regain a good reputation, but there is still a long way to go, which will be cost-consuming as well.
Humanistic Management Implementation
The new management approach of humanistic management is developed on the foundation of theory and practice, science, and culture. It also involves the concepts of humanism and human-centeredness, which must meet the high effective standards of highly developed societies (Laszlo, 2019). The post-industrial era as a socio-cultural context of today’s managerial paradigms gives rise to new socio-cultural tendencies related to the formation of new approaches to humanitarianism, activities, and professionalism.
The need to position humanistic management in the framework of modernity is connected with the studies of the theoretical foundations of post-industrialism. Modern concepts of post-industrial, information and cognitive society require a cultural justification for the formation and development of humanitarian-oriented innovative activities of public humanitarian governance (Dierksmeier, 2020). The foundations of humanistic management are human relations, human resources, and behaviorism.
Humanistic management might be considered as a new kind of public managerial activity. It aspires to achieve a significant qualitative change within the scope of all social spheres by means of humanism and anthropocentrism, utilizing appropriate resources and technologies (Bachmann, Sasse and Habisch, 2018). Humanistic management is founded on the notions of identity, competence, communication, advanced self-determination, and cultural policy. It is conceptualized as an innovative type of public activity in its creative interpretation. Such an approach is a socio-cultural phenomenon implemented into the field of a post-industrial scale of virtues that come from theories of humanitarian activities.
The systematic methodology of humanistic management is significant, given that it is founded on the principles of order and integrity. The idea of multivariate development acquires great methodological appropriacy, based on the reassessment of the roles of objects and subjects within the scope of the introduction of subject-subject management (Pirson and Keir, 2018). The result is that humanistic management is transformed into socially-oriented management, adopted as a paradigm of sustainable development of modern society.
The main goal of humanistic management is to create a mechanism of socially-oriented public administration that promotes the development of effective humanitarian technologies. This approach also contributes to the formation of the concept of humanistic principles of human development, which would operate at the level of society and human development. Humanistic management considers humanism as an effective tool of knowledge, which is possessed by mankind, and which cannot be replaced by religion, enthusiasm, or intellect.
Scientific methods that have revolutionized the natural and social sciences through social humanism are aimed at solving the major problems in the context of globalization (Frémeaux and Michelson, 2017). The value and significance of each individual in the context of globalization is the basic idea of humanistic management, as a person should be able to realize their creative abilities and realize their hopes.
The concept of humanistic management involves the introduction of new methods of developing corporate policy aimed at negotiations, as well as new ways to implement it, in particular through partnerships. This concept leads to a rethinking of the relationship between different economic, social, and political actors, based on the need for their interaction (Deterding, 2019). In order to create an effective system of humanistic management, the ideology of “serving society” as a fundamental principle of the management system must be introduced.
Thus, it seems apparent that humanistic management should be an integrated element of a firm’s policy today, given the importance of significant interactions with and positive effects of a business on society. In another case, a company may face a number of severe issues. In this vein, the example of Wells Fargo seems appropriate. This bank was involved in the sound case of an unacceptable incentive system that rewarded the appalling behavior of its employees.
According to Cohan (2017, para. 2), “There was the scandal that resulted from bankers opening (and then closing) millions of unauthorized accounts to meet sales goals, with the hope of getting bigger bonuses.” This negatively affects society because people are being deceived and thus involved in unhealthy business-consumer relations. The corporation’s top governance should not have allowed this approach as it contradicts the concept of humanistic management. As a result, the bank faced many reputational problems, as well as client outflow.
COVID-19 Challenges
Continuous and rapid changes in the world associated with COVID-19 increase the importance of appropriate management in every organization for operational interaction with the business to reduce the impact of the pandemic and the success of the company in adapting to the new world realities through competent personnel management. Protecting people while ensuring business resilience is now a top priority for every organization on the planet (WEF, 2020a; WEF, 2020b; The United Nations, 2020; Kalish, 2021). Personnel management tactics in a pandemic should be formed in a comprehensive manner and rely on a clear understanding of the consequences of each decision made, as well as on an updated business strategy for overcoming the crisis.
In conditions of growing anxiety in society, the employer often becomes a key reference point for employees in the context of receiving timely and high-quality information about the development of the situation in the country and the world. It imposes an increased responsibility on managers for shaping the communication strategy in the company (Assche and Sarianna, 2020). In addition, to maintain business resilience, it is important to provide employees and managers with the necessary technical capabilities and knowledge to competently manage teams in the current circumstances and virtual work of teams remotely.
Many organizations turned out to be unprepared for a rapid change in the operational model of personnel management and adaptation to new unplanned realities. There are five crucial management directions for dealing with the consequences of the development of the COVID-19 pandemic (Weidemeyer, 2020): assessing the impact of the pandemic on people and business; the movement of workers; protection of workers; organization of work and technology; ensuring the sustainability of business processes.
Managers in the tourism sector will be the hardest hit in the short term. TUI, Virgin Atlantic, and EasyJet – British airlines – have announced hiring suspensions due to a sharp decline in ticket bookings (BBC News, 2020). British carriers are suggesting that employees take unpaid leave to alleviate the COVID-19 financial crisis. Flybe stopped working at all, blaming the coronavirus for being the last straw in an already difficult situation (Magra and Tejada, 2020).
Hotels, cruises, and tour operators have also been hit hard as travel declines, both for business and leisure. The tourism industry is experiencing its worst crisis in 18 years. Meanwhile, Hyatt’s management policy may be a noticeable example of how a hotel chain demonstrates a great extent of adaptation to such severe conditions. It pays much attention to the five abovementioned principles and remains competitive and profitable even today (Hyatt, 2020). The chain’s daily practices may be characterized as ones founded on appropriate risk management and corporate social responsibility, which brings significant results.
Conclusion
To conclude, the issues of reputation management, humanistic management implementation, and COVID-19 challenges through managerial perspective were discussed, as well as the relevant examples provided. It was found that if the mentioned issues are not addressed appropriately, a company will face a great number of problems – starting from the loss of profits and ending with an insignificant performance in general. Thus, it is essential to follow the best practices in this regard, which will assist in remaining competitive in the long run.
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